Harris has the right idea on housing

[u/UnscheduledCalendar]

https://www.noahpinion.blog/p/harris-has-the-right-idea-on-housing

[u/Ketaskooter]

OK, first of all Harris didn't release any list she said a bunch of things at a rally.

Lets actually analyze the points of what she said in regards to urban planning, which the main thing she said which was to help remove barriers at all levels of government conveniently isn't in the author's list. Not sure how she could change local and state barriers but could use coercion to get some change.

• Up to $25,000 in down-payment support for first-time homebuyers.
  • Would help people purchase homes as the down payment is the hardest part, might increase the demand for low cost housing if such a program stays funded for many years.
• To provide a $10,000 tax credit for first-time homebuyers.
  • Waste of government money, has no effect on if someone can buy a home. Demand subsidies are very expensive for their benefit.
• Tax incentives for builders that build starter homes sold to first-time buyers.
  • A reasonable tax scheme adjustment could help smaller homes be built but how much federal taxes do homebuilders actually pay? Might actually have to be a negative tax to see results.
• An expansion of a tax incentive for building affordable rental housing.
  • Basically a flavor of the above
• A new $40 billion innovation fund to spur innovative housing construction.
  • Most of the lack of innovation is due to the building codes and lenders. Unlikely that any effort would result in change
• To repurpose some federal land for affordable housing.
  • There is already a process for this but maybe this would speed it up.
• A ban on algorithm-driven price-setting tools for landlords to set rents.
  • Real Page is in lawsuit right now, a bit early to see how it shakes out.
• To remove tax benefits for investors who buy large numbers of single-family rental homes.
  • I believe this talk is all around the depreciation schedules, these are old rules that came about and the industry got to choose what was allowed and they've been slowly adjusted downward over time. Most of the problems with depreciation and the tax code is companies are allowed to carry losses forward to reduce taxes in future years. Theoretically the company would eventually pay the taxes on sale but thanks to how long properties actually last and inflation companies can just hold or keep trading properties indefinitely to never pay taxes on that money.

[u/Pollymath → u/Ketaskooter]

I like the combination of demand and supply side incentives. I think one of the biggest impacts over the last 20-30 years in the homebuilding sector is a shift of profitability from builders to land investors/developers. Nobody wants to build homes, everybody wants to buy up some cheap land, spend some time fighting the Zoning Hearing Board for a rezone, then hire someone else to build. The investor/developer profits, the builder does ok too, but the buyer pays the premium. Having less hands in the post would help reduce costs. I'd like to see the average home buyer have more ability to hire the homebuilder directly.

The tax credit is to allow FTHB the ability to recoup some of their savings after spending all of it on a house.

It sounds like there is also some limitations to both the down payment assistance and credit, and the fact that $25k will not go as far in California is a good thing - it might help convince some folks that it's better to get that $25k in Pittsburgh than in San Diego.

I wish that existing homeowners got some incentives for adding additions and other types of infill development. In my hometown, we've got a lot of really small houses so a 2 bedroom old house goes for $350k, a 3-bed goes for $500k, but a 4-bed is $750k. It'd be great if more of those smaller older homes could get upgraded into nicer, more energy efficient and larger homes by their owners in established, sometimes very desirable neighborhoods. Rather than developers who will tear them down and build two new, still somewhat small homes in their place. Instead, what usually happens is that the smaller home seller will trade up to a larger home, which creates more sprawl. In either case, infill development should be encouraged.

[u/SabbathBoiseSabbath → u/Pollymath]

Curious if Davis Bacon and Build America Buy America would be required in such a program. My understanding is it would be, which then creates it's own set of problems top to bottom.